IPhone Production Cuts: Worrying or Exciting News?
Having a hot, new iPhone 5S out on the market might not help if no one thinks high-end smartphones are going to sell well, including Apple (NASDAQ:AAPL) itself. Apple may be cutting production of its iPhones, but what does the move suggest?
Brian Blair of Wedge Partners was the one who suggested the likelihood of Apple cutting the production of its iPhones, including older models and yet-to-be-released models, from between 115 million and 120 million units down to between 90 million and 100 million units. This would be about a 20 percent reduction in production.
The reduced production estimates stem from Blair’s belief that “slowing demand for high-end handsets globally” will impact Apple, which has only launched high-end smartphones to date. Though investors may have hope that a new run of products from Apple could turn the stock around from months of negativity, a new iPhone won’t mean much if it has low sales. However, there may be more to it than just poor market performance for high-end phones.